T-Mobile (TMUS, Financial) has announced notable growth in its customer base, reporting a total of 1.4 million net customer additions, marking an increase of 210,000 compared to the same period last year. The company continues to expand its reach in various segments, reflecting both achievements and challenges in its growth strategy.
The telecom giant added 1.3 million postpaid net customers, which is an increase of 117,000 year-over-year. Postpaid phone net additions were 495,000, slightly down by 37,000 from the previous year. However, the postpaid phone churn rate rose by 5 basis points to 0.91%. The figures for postpaid net account additions also saw a minor decline of 13,000, settling at 205,000.
In the prepaid sector, T-Mobile achieved 45,000 net customer additions, which represents a significant surge of 93,000 compared to last year's figures. Prepaid churn improved, decreasing by 7 basis points to 2.68%.
High Speed Internet services showed promising growth, with 424,000 net customer additions, an increase of 19,000 year-over-year. This brings the total number of High Speed Internet customers to 6.9 million.
Overall, T-Mobile's total customer connections reached a new milestone of 130.9 million, highlighting the company's ongoing expansion efforts and its solid position in the telecommunications market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 25 analysts, the average target price for T-Mobile US Inc (TMUS, Financial) is $267.00 with a high estimate of $300.00 and a low estimate of $202.99. The average target implies an upside of 1.84% from the current price of $262.18. More detailed estimate data can be found on the T-Mobile US Inc (TMUS) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, T-Mobile US Inc's (TMUS, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for T-Mobile US Inc (TMUS, Financial) in one year is $172.74, suggesting a downside of 34.11% from the current price of $262.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the T-Mobile US Inc (TMUS) Summary page.
TMUS Key Business Developments
Release Date: January 29, 2025
- Postpaid Phone Net Additions: 903,000 in Q4 2024.
- Postpaid Service Revenue Growth: Over 8% in Q4 2024.
- Core Adjusted EBITDA Growth: 10% in Q4 2024, 9% for the full year.
- Diluted Earnings Per Share: Highest-ever for the full year 2024.
- Free Cash Flow: $17 billion for the full year 2024.
- Cash Flow Conversion from Service Revenues: 26% for the full year 2024.
- Broadband Net Additions: 428,000 in Q4 2024.
- Postpaid ARPA Growth: Highest rate in over seven years in Q4 2024.
- 2025 Postpaid Customer Net Additions Guidance: 5.5 million to 6 million.
- 2025 Service Revenue Growth Expectation: Approximately 5% for the full year.
- 2025 Core Adjusted EBITDA Guidance: $33.1 billion to $33.6 billion.
- 2025 Cash CapEx Expectation: Approximately $9.5 billion.
- 2025 Adjusted Free Cash Flow Guidance: $17.3 billion to $18 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- T-Mobile US Inc (TMUS, Financial) achieved its highest-ever postpaid phone gross additions in 2024, marking the greatest growth year in its history.
- The company led the industry in postpaid phone net additions in Q4 2024, with 903,000 net additions, and maintained the lowest-ever total postpaid churn.
- T-Mobile US Inc (TMUS) saw over 60% of new customers selecting premium plans, leading to the highest postpaid ARPA growth in over seven years.
- The company delivered its highest-ever diluted earnings per share and free cash flow of $17 billion in 2024, with a cash flow conversion from service revenues of 26%.
- T-Mobile US Inc (TMUS) was recognized by third parties for network leadership, winning all five overall network experience categories from OpenSignal and outperforming competitors in Ookla's assessments.
Negative Points
- The wholesale revenue is expected to reach its low point in 2025 due to the planned tapering of partnerships with companies like DISH and TracFone.
- The company faces challenges in maintaining growth in fixed wireless access, with a slight decline in high-speed Internet-only accounts compared to previous quarters.
- T-Mobile US Inc (TMUS) is navigating the complexities of multiple acquisitions and joint ventures, which may impact financials and require significant integration efforts.
- The company is exposed to potential impacts from immigration trends, although it claims to be insulated due to its focus on premium monthly prepaid subscriptions.
- There is uncertainty regarding the financial impact of new ventures like the Vistar acquisition and the expansion of satellite services, which are still in early stages of development.
